The Employment Market Exchange: Do Top Job Seekers have leverage?

In order to complete our Masters degree at the Stockholm School of Economics, all of the authors on this blog are required to write a master thesis. My thesis will attempt to analyze how firms implement a mobile recruiting strategy in the context of a larger integrated recruitment market communication program.

In order to get some feedback on the progress of my paper, I thought it would be wise to blog a bit. I’ll attempt to adapt the style of writing to fit the medium and the audience, but for the most part I’ll simply cut and past a part of the paper into this blog. So blog lovers, please excuse the academic style writing.

Now let’s get started….

At the beginning of my paper I attempt to introduce the idea of recruitment marketing by defining recruiting (i.e. the first step in the employment relationship) as a form of market exchange akin to a high-involvement consumer market exchange (e.g. like buying a car). In this sense, the goal of recruitment marketing for the employer is to facilitate the exchange in order to maximize human capital returns (i.e. the skills, abilities, experiences the applicant can bring to the organization).

Defining employment as a market exchange forces recruitment marketers to consider job seekers as employment consumers free to choose another supplier of employment – just as a consumer may choose another product/brand. So in order to be successful in recruiting target talent, the employing company (i.e. the seller) is required to recognize potential applicants (i.e. the buyers) as valued customers of the organization, rather than simply “assets” to be owned. In this context:

-the product is the job offer
-price of the product is the salary and benefits offered (i.e. functional and symbolic)
-the place is the place of employment
-the promotion is the communication that the organization has with its prospective applicants

Adopting this perspective, recruitment marketers should focus on understanding the desires, needs and expectation of job seekers, and work towards meeting those needs by adapting and shaping the marketing mix (i.e. product, place, price, and promotion).

If the employment relationship is analogous to a market exchange, all actors party to the exchange will attempt to maximize their utility (i.e. extract the greatest value for least expenditure). In a labor market, hiring firms will attempt to attract and employ the highest quantity and quality talent for the lowest expenditure of time, money, and effort possible. In a similar fashion, job seekers attempt to obtain the greatest amout of monetary and non-monetary value possible for their respective level of human capital (i.e. skills, abilities and experience).

How can top talent negotiate this type of market exchange in order to maximize their returns?

This is where the whole analogy gets complicated. If your a top tier graduate looking for work, the market information you’re receiving can seem contradictory and confusing. As a top job seeker coming out of the best university with the best profile, you’re simultaneously told that unemployment is on the rise and companies are reducing hires, AND that there is a full on ‘war for talent’ and employers are struggling to find qualified talent. So which is it? Are top graduate supposed to be desperate buyers, taking anything they can get? Or should they use their position to leverage a better deal?

If you’re a candidate from the best University, involved in exclusive extra curricular activities, completed some of the most sought after summer internships, and a member of exclusive top talent type networks, how exactly are you supped to navigate this type of marketplace? If you really know your worth as an employment consumer, how do you negotiate this exchange in order to not only land the job, but also receive those extra benefits most ‘regular’ job seekers wouldn’t even dream of asking for?

I don’t know the answer to this question, but a few weeks ago some of my “top tier” classmates – the type of candidates employers dream of – debated this question. We came to the conclusion that, if top talent have that much value and truly posses the type of human capital employers are going to “war” over, then they should be able to enter this market exchange with at least a little bit of confidence that they hold on to something the employer wouldn’t be so flippant to loose.

We went on to joke that the next time one of us went into the negotiation round of the recruitment process, we would attempt to do what Jack Donaghy does in an episode of 30 Rock.

In this episode Jack has to negotiate licensing fees with the company that now owns NBC. While he struggles to figure out his tactics for this negotiation, he gets worked over in the salary negotiations with his trinidadian baby nurse; which teaches him that when you own or care for something of great value to the other party you can use it as leverage to get what you want. At the end of the episode he realizes he has leverage with his new employer (i.e. the life and success of NBC) and uses the same tactics as his baby nurse to get what he wants from the negotiation.

Basically, he enters the room, makes his demands, then sits back and peals open an orange while saying “so, whatcha’ wanna do?” Exactly what his baby nurse did. And he gets what he wants.

— I Can’t find a video clip, but will add one when I find it. Its 30 Rock, Season 5, Episode 15. Here’s a picture of it to give you an idea of what I mean—

Now imagine yourself, as a really top job seeker, going into the negotiation round of a job interview with the same confidence as Jack does. Wouldn’t that be amazing?! Sitting back and saying: “here are my skills, values, experiences, qualifications, etc., and these are my demands.” And then pealing open an orange while saying… “So whatcha’ wanna do…”.

I challenge any super top job seeker out there who has the confidence to do this, to do it and tell me how it went.

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